Despite fervent warnings from law enforcement, Internet gambling — accessible anywhere and by anyone — appears to be moving forward full tilt.
On Nov. 26, New Jersey joined Delaware and Nevada in offering legalized Internet gambling. Cash-starved states are eyeing it as a new source of revenue, with California expected to consider the issue next year.
There are numerous hidden dangers with Internet gambling, however, that Congress must immediately address.
America’s law enforcement community knows the risk. The FBI in 2009 warned that Internet gambling can be used by criminal elements for money laundering and fraud. The agency questioned whether the technology exists to guarantee that children and people with gambling problems are kept away from the sites, countering claims that such technology was available: “While the vendors may claim that they can validate age and location, they are more than likely relying on credit card information and geolocation to gather this information. Both can be spoofed.”
In the same letter, the FBI rattled off a litany of potential abuses, including money laundering: “[It] could be used to transfer ill gotten gains from one person to another, or several other people.”
In addition to some of its fatal flaws, we know from polling that the vast majority of Americans — uniformly, across all demographics — don’t want Internet gaming. They know instinctively that Internet gambling is different.
A recent poll by The Tarrance Group revealed a stunning statistic: even self-described libertarians oppose it.
These voters are glomming onto one of the lesser known consequences of Internet gambling: new layers of government bureaucracy. States are simply not equipped to police online gambling, so when one state gives its approval, it effectively thrusts Internet gambling upon other states.
States rigorously license and regulate land-based casinos. In turn, the gaming industry has implemented effective policies to promote responsible gambling by barring participation by minors and to fully comply with laws ranging from gambling controls, money laundering and tax payments. Such protections of the public interest are not fully available with Internet gambling. As 48 state attorneys general recognized in a letter to Congress in 2006: “Internet gambling is a threat to this carefully crafted system.” They concluded:
“[T]he potential problems associated with the availability of gambling activities on the Internet are exacerbated because the inability of technology to reliably guard against many of the same hazards that led to the policy considerations used by jurisdictions to construct their gambling regulations. These policy considerations include moral attitudes towards gaming, issues of game integrity, effective consumer dispute resolution procedures, access to gambling by minors, cash controls to hinder money laundering and other criminal activity, as well as efforts to recognize and treat problem gamblers.”
So, why then are we facing the spread of Internet gambling?
At the center of the debate over Internet gambling is a radical new interpretation of the long-standing Wire Act. Since 2006, there has been a federal ban on Internet gambling that drew bipartisan support, including the vast majority of state attorneys general.
However, on Dec. 23, 2011, the Justice Department — with no public input or congressional involvement — issued a legal opinion reversing its long-held position that the Wire Act bars Internet gambling, opening the door for states to authorize non-sports wagering over the Internet.
Allowing Internet gaming to invade the homes of every American family, and to be piped into our dens, our living rooms, our workplaces, and even our kids’ bedrooms and dorm rooms, is a major decision.
Congress needs to act now to restore the long-standing interpretation of the Wire Act, and put up a firewall to guard against the offshore illegal Internet casinos up and running already. Law enforcement should use the tools, resources and authorities it has to crack down on these rogue operators — often controlled by criminal enterprises — and ask Congress for whatever additional resources it needs to shut down illegal sites.
Given this momentum, we must act now. Otherwise, Internet gambling will be unleashed nationwide.
Pataki served as governor of New York from 1995 to 2006. Lincoln served in the U.S. Senate from 1999 to 2011. Webb was the first African-American mayor of Denver, serving from 1991 to 2003. The three are national co-chairmen of the Coalition to Stop Internet Gambling.